Greg Hinz On Politics

Aldermen sink teeth into infrastructure bank debate

Mayor Rahm Emanuel's proposal to set up a huge Chicago Infrastructure Trust Monday ran into a buzz saw of aldermanic skepticism, as the City Council Finance Committee began debate on the measure.

The betting at City Hall still favors the measure winning approval by the committee and then the full council as soon as its Wednesday meeting. But that doesn't mean an easy process for the proposed $7 billion bank, which aims to fund city capital projects.

"This is ambitious," he said, but given past city screw-ups with exotic funding on privatization of its parking meter operation, "we need to understand it."

Chief Financial Officer Lois Scott in her opening remarks noted that the trust is based on similar setups already operating in some states and in Europe, and it would give the city a new tool to attract badly needed infrastructure capital.

Among other things, the Chicago Infrastructure Trust would allow union pension funds and charitable foundations to invest here and give the city a way to take risk off its balance sheet. It would do that by making payment of any borrowed funds dependent on how the investment performs, and not put the burden on taxpayers.

One line of questioning by Mr. Reilly: Will the city have to give up too much in the form of higher user fees to lure private developers to accept the risk of investing in city projects?

Ms. Scott replied that the city and its sister agencies, such as the Board of Education, already have the right to raise taxes and fees to pay for public infrastructure projects.

But Mr. Reilly noted that while specific projects involving city resources would have to be approved by aldermen, infrastructure bank projects by the schools, Chicago Transit Authority and the like would need the approval only of their governing bodies, not the City Council.

Mr. Reilly did not appear to get a satisfactory answer when he asked whether the proposed ordinance would allow the city to enforce a ban on revolving-door actions by bank board members who leave that agency to go work for private firms that get bank-funded projects.

Ald. Scott Waguespack, 32nd, questioned why Mr. Emanuel waited until Friday to add new provisions mandating that all bank actions would be subject to the state's open meetings law and Freedom of Information Act.

Those late changes in language "suggested to me that there was something fundamentally wrong," he said.

Ms. Scott replied that the changes merely clarified the city's desire for transparency.

Another alderman, Pat Dowell, 3rd, asked whether investment groups that structure themselves as nonprofits would be subject to the FOIA and open meetings provisions.

The Finance Committee continued debating the measure into the afternoon, with a vote expected sometime later Monday. Any two aldermen could defer and publish the proposal on Wednesday, delaying further action, but Mr. Emanuel could then call a quick special council meeting within a few days.